Key Takeaways
- Bitcoin’s slide from a $126,000 peak and an $8.3 billion Q2 unrealized loss drove Strategy stock down 53% over the past year.
- A dollar reserve that fell to $871 million and a preferred stock that dropped into the 70s turned a Bitcoin selloff into a funding scare.
- Strategy stock has risen 72% in three months as the reserve rebuilt to $4.8 billion and Bitcoin touched a seven-month high.
Why Strategy Stock Fell 53% as Bitcoin Slid and Its Dollar Cushion Ran Thin
Strategy’s preferred stock, STRC, which is built to trade at $100, fell into the 70s on June 26. That day captured why Strategy stock (MSTR) is down 53% over the past year.
Bitcoin set the direction. It peaked near $126,000 in October 2025, then closed the second quarter around $58,700. Strategy had bought a net 83,901 Bitcoin that quarter at an average price near $75,500, so the drop produced an $8.3 billion unrealized loss and an $8.6 billion net loss attributable to common stockholders and a $24.45 per share loss against an estimated loss of $7.52.
Leverage widened the damage. CEO Phong Le said on the Q2 earnings call that “Bitcoin has seen a drawdown of 50% from all-time highs,” while “MSTR has seen a drawdown roughly 75% of all-time highs.”
A funding scare did the rest. Strategy had spent its dollar reserve retiring $1.5 billion of 2029 convertible notes, leaving $871 million, and dividend and interest coverage fell to 0.5 years by May. STRC holders collect a 12% annual dividend and depend on that reserve. The preferred slipped below its $99 to $100 target range on May 28, and Strategy sold 3,588 Bitcoin at $60,000 to fund preferred dividends, a break from its one-way buying.
Lower Bitcoin, a thinner reserve and a preferred below par fed one another, and the common stock took all three hits.
MSTR Stock’s 72% Rebound Fixes the Funding Scare, Not the Bitcoin Gap
Strategy rebuilt the cushion first. The dollar reserve reached $3.75 billion by the Q2 call, or 2.1 years of coverage, and Le put it at $4.8 billion on August 18. On August 24, Strategy set aside about $1.6 billion in a cash pool for Bitcoin purchases and buybacks, and MSTR rose for a fourth straight session to $125.
Bitcoin supplied the lift. It rallied roughly 25% over seven sessions after President Donald Trump urged Congress to pass a crypto bill and the Treasury moved to support long-dated bonds. On September 21, Bitcoin touched a seven-month high and Strategy stock showed the leverage working in reverse: Bitcoin gained 4.7% in that session and MSTR jumped 9.6%.
The rebound repairs the funding fear. It does not close the Bitcoin gap. Bitcoin near $86,000 still trades well below its $126,000 peak, and MSTR tends to amplify Bitcoin’s moves in both directions. On September 21, for example, Bitcoin gained 4.7% while MSTR jumped about 9.6%.
STRC is the next test. Management targets $99 to $100 for the preferred and a reserve of 2 to 3 years of coverage. The next quarterly report will show whether Strategy stock’s rally rests on both.
So what is Strategy Inc stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
